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Boxagon
Location: TechHub, 4-5 Bonhill Street, London, United Kingdom United Kingdom
Founded in: 2013
Stage: Revenue generating
Number of employees: 1-5
Short URL: vator.co/boxagon
Followers (7)
Awards and mentions
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Selected to be one of 15 European startups to present at Internet World, on of the flagship events of London Tech Week.
Vatorx1

Boxagon

Social commerce for bundles.
Startup/business
London, United Kingdom United Kingdom
http://boxagon.com
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Company description

Overview

Boxagon is a social commerce platform where you can create and discover bundles or “boxes” of items that go well together for all types of adventures. So if you’re travelling to the rainforest or running your first marathon, you can search through the site and see boxes with items that other users recommend for these events.

What problem are we solving?

Whenever people are buying equipment online to start a new adventure, they end up having to spend a lot of time researching or going through blogs to find out what they really need to purchase. Most online stores do a poor job at helping you find bundles of items that go well together (we're often underwhelmed with the “Frequently bought together" algorithms). So Boxagon helps you find and create these great sets of items we call "boxes".

Box example

 



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Team
  • Juan Diego Farah
    Juan Diego Farah | Founder
    CEO & Founder at Boxagon, Member of the Board at Mimanzana. Previously M&A professional at Goldman Sachs & Co.
  • Juan Carlos Farah
    Juan Carlos Farah | Founder
    Juan Carlos Farah is Co-Founder and Chief Scientist at Boxagon, a platform that leverages big data to help users shop socially.
  • Tony Acuña-Rohter
    Tony Acuña-Rohter | Founder
    Tony is CTO & Co-Founder at Boxagon. Tony has experience as a Lead Software Engineer and Project Manager at the Chicago Mercantile Exchange. Tony has also made significant contributions to the financial derivatives markets as the lead inventor of ...
Business model

Partnerships

We partner with stores so that they can create boxes with the products they sell. In this way, a box essentially becomes a pre-arranged checkout cart consumers can use to start their shopping experience. They can also embed these boxes on their own website.

See an example here

 

We also partner with non-store businesses such as hotels who often need to tell their guests what to bring on their trip. Instead of sending them to a long and boring text description, the hotel can use a box with all the items they recommend.

See an example here.

 

Fees

Boxagon works with an affiliate marketing business model. We gain an affiliate marketing fee from every successful sale that we send to a store. Fees range from 4% to 15% of the total value of the transaction.

We will also have paid features for stores like "Promoted Boxes", which is more akin to a PPC model.

How big is the market?

Out of every 100 items sold online in the US, 23 are sold through affiliate marketing, which is the same amount as SEO and larger than PPC. Taking into account average fees of 8-10%, this means that the size of the US affiliate market alone is roughly USD 6bn, and growing at 15% annual growth rates for the next three years.

Competitive advantage

1) We focus on user behavior that is further down the purchase intent funnel

Boxagon is not Pinterest. Not even close. Pinterest focuses on random discovery. Boxagon focuses on answering the question: "What do I need to buy in order to...[Fill in the blank]". That blank can be anything from climbing Mt. Kilimanjaro, to going kitesurfing. We focus on demand fulfillment instead of demand generation. So basically, we are the equivalent of Google Adwords in the social commerce world, while our competitors are more like Facebook Ads. 

2) There is a huge gap in the social commerce market

There are two reason why this is the case. A) Most social commerce sites focus on fashion. They have infinite feeds of clothing products. Only a few venture outside this vertical successfully. B) With the exception of Polyvore, all social commerce sites focus on individual items. Only Polyvore focuses on helping their users create fashion bundles. So basically, no one has successfully breached into sports, travel, DIY, and other verticals.

3) Product bundles are useful and create barriers to entry

Anyone can create a social commerce site with individual items. You can tap into a number of databases and build a nice UI. But then you need to work hard to stand out. Boxagon on the other hand has a challenge that becomes an advantage. As our database of boxes grows, it becomes harder to replicate and more useful for our users. Essentially we are building the world's largest database of pre-arranged checkout carts for all types of situations. The quality of these bundles is much higher than algorithmically create bundles, and it becomes more of a challenge for our competitors to copy us.

4) Bundles help stores increase the size of their average checkout cart.

People tend to buy more than one item if they see things in context. It is hence no surprise that if a store posts on a social media site, they will get the highest average order from posting on Polyvore. We want to replicate this success across other verticals.

See information from Shopify here.

 

Questions and Answers
 
Q: Who is making boxes and why would someone make a box?
 
A: We have three types of users creating boxes: stores, non-store businesses, and individuals. Stores build boxes in order to promote their products. Non-store businesses create boxes for example to help their clients find the stuff that they need. In this category you can find hotels recommending items to guests, or teachers recommending things to students. For individuals we found that people tend to build a box if someone asks them to do so, so we’re currently building a feature where a user can request a box from a friend or another user, similar to how a Q&A forum like Quora works.
 
Q: Is there a viral component to Boxagon?
 
A: Boxes are shareable content, so we have found that some partners want to embed the box onto their own website or in a blog post as demonstrated above. This becomes a great distribution channel for us and helps us increase our traffic.  We also expect people to use our Request a Box feature to ask their friends to assemble boxes for them.

Q: Who are your competitors?

A: Our main competitors are sites like Polyvore, Fancy, or Wanelo. Out of these, Polyvore is the closest. They basically help their users create collages of fashion outfits, which are similar to boxes. That being said, they focus mainly on the fashion vertical, so there is a big gap in the market for travel, sports, DIY, etc. Regarding Fancy / Wanelo, they focus on individual items so they are not direct competitors to Boxagon.

Q: What type of traction do you have?

A: We started our marketing effort in April this year so our partners network is still small, but growing every week. That being said, we already make revenue from affiliate marketing fees so we are confident our business model can scale massively.